• Non-ICIMOD publication
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Payments for environmental services: An equitable approach for reducing poverty and conserving nature

This paper looks at Payments for Environmental Services (PES) as an equitable approach for reducing poverty and conserving nature. It presents a number of case studies including Guatemala, Peru and the Philippines, whilst also discussing the World Wide Fund For Nature (WWF) approach to equitable PES.

The authors argue that the concept of PES has received substantial interest in recent years as a way of creating incentive measures for managing natural resources, addressing livelihood issues for the rural poor, and providing sustainable financing for protected areas. It is pointed out that there is great potential for equitable PES as a valuable financing mechanism for conservation that can deliver both sustainable natural resource management and improved livelihood security for the rural poor. They also call on all stakeholders including governments, development agencies, conservation organisations, business, and local communities to explore the value and promote the use of equitable PES.

Key concluding points include:

  • important economic values of natural ecosystems and biological diversity need to be properly recognised, priced, and internalised into markets through appropriate measures such as equitable PES;
  • sustainable use of biological diversity, one of the three objectives of the Convention on Biological Diversity (CBD), can be enhanced by the application of incentive measures such as equitable PES that reverse the perception of biological diversity as a low cost externality and prevent its long-term decline and deterioration;
  • incentive measures that affect the rural poor can only be sustainable if socio-economic development is integrated into the design phase of these incentives from the start.